It’s no surprise that super fund members are worried. SuperRatings estimates the median balanced option generated a return of -0.4 per cent for February and expects further ups and downs in returns in coming months.

This follows a fall of -4.8 per cent return in 2022, the first negative calendar year since 2011.

According to UMR Strategic Research, the market swings last year caused a third of industry fund members to consider changing their super options. Worryingly, one in five said they had switched to more conservative options during market dips since the start of COVID-19. And, those aged between 18 and 34 were the most likely to change investment options.

Given the risk of members of members having knee-jerk reactions and crystalising losses, communications and advice are front of mind for super funds.

“Clearly communicating investment performance is essential at any time and market volatility only amplifies its importance,” Colonial First State’s chief customer officer Joshua Grace tells Investment Magazine. 

Similarly, REST’s chief member officer Deborah Potts says market fluctuations can be unnerving for members which highlights the importance of communication during periods of volatility.

“Rest is the largest super fund for young Australians, with more than 1.2 million members under the age of 35, and we know many don’t understand their super. We also know people of all ages can find the prospect of a negative investment return worrying during periods of market volatility.”

Higher demand for advice

REST picked up a strong correlation between market movements and a rise in member requests for advice about investment choice according to Potts.

“During these periods, inquiries to our advice team can increase by up to three times the normal volume,” she says.

“The call volumes at our contact centres can also rise – for example, they were above forecast levels in May and June 2022. Accordingly, our advice and member teams provided increased levels of support over this period.”

Similarly, Aware Super also fielded more call from members seeking help. “While there hasn’t been a significant spike in activity at our call centre, we are receiving more calls from members who are looking for help and advice and are interested in discussing investment options,” says deputy CIO Damien Webb.

The fund also experienced a small increase in switching activity but far less than during the onset of the pandemic.

“We’re really encouraged by the limited switching activity as it indicates members increasingly appreciate the importance of staying the course with their investment strategy if their circumstances haven’t changed. We also observe the value of advice in assisting members to navigate conditions,” he says.